Coinbase Says SEC Is Close to Dropping Enforcement Case

Coinbase Global Inc. announced that the Securities and Exchange Commission (SEC) is set to dismiss its lawsuit against the company, marking a significant victory for the largest U.S. cryptocurrency exchange. The lawsuit, which accused Coinbase of operating an illegal exchange, broker, and clearing agency, is awaiting final approval from SEC commissioners, the company said.

Coinbase’s stock reacted positively to the news, rising 4.8% to $268.51 in premarket trading. Bitcoin also saw gains, climbing over 1% to trade around $99,500.

SEC’s Changing Stance on Crypto Regulation

The decision represents a major reversal from the regulatory approach under former SEC Chair Gary Gensler, whose tenure was marked by strict enforcement actions against the digital asset industry.

Last week, the SEC also moved to pause its lawsuit against Binance, citing the need to reassess crypto regulations under President Donald Trump’s administration, which has been seen as more crypto-friendly.

• The SEC’s complaint will be dismissed with prejudice, meaning the agency cannot refile the case against Coinbase.
• Paul Atkins, a known crypto advocate nominated by Trump to lead the SEC, has yet to be confirmed.
• A spokesperson for the SEC declined to comment on the case.

Coinbase CEO: “No Fines, No Changes to Our Business”

In a statement on X (formerly Twitter), Coinbase CEO Brian Armstrong confirmed that the dismissal would result in no penalties and that Coinbase’s business operations would remain unchanged.

Coinbase was among several crypto firms that ramped up lobbying efforts in Washington, donating millions to support pro-crypto lawmakers. The company also contributed $1 million to Trump’s inaugural committee and added Chris LaCivita, a former Trump campaign co-manager, to its global advisory board.

What This Means for Coinbase and the Crypto Industry

For Coinbase, the dismissal clears a major legal hurdle that had threatened to limit its crypto token listings and growth potential.

"Now that this case is over, you will see Coinbase doubling and tripling down on efforts to bring new products and services to market," said Paul Grewal, Coinbase’s Chief Legal Officer.

The company is now working with Congress and regulators to establish new rules on stablecoins and digital asset market structures, aiming to provide long-term clarity for the industry.

SEC’s 2023 Lawsuit and the Fallout from FTX Collapse

The SEC sued Coinbase in June 2023, as part of a broader crackdown on the crypto industry following the collapse of FTX. The lawsuit alleged that most crypto tokens fall under SEC jurisdiction and that Coinbase was operating without proper registration.

Under Gensler’s leadership, regulators also warned banks against involvement in crypto, making it harder for U.S. investors to access digital assets.

With the SEC now shifting its stance, Coinbase and other firms hope to see favorable regulatory changes that allow for innovation and market expansion.